In the most recent of many class action lawsuits against Geico, the insurance company has agreed to pay nearly $2 million to settle a class-action lawsuit based on an alleged failure to pay title or registration transfer fees in cases of total loss of insured vehicles.
This class action lawsuit was filed in New Jersey federal court, and on July 1, a federal judge was urged to approve the preliminary settlement.
Diane McCoy v. Geico Indemnity Co: $1,9 Million for Customers
Lead plaintiff Diane McCoy filed a motion for preliminary approval of the settlement, seeking to resolve allegations that Geico failed to pay title or registration transfer fees following the total loss of vehicles.
McCoy, representing approximately 33,000 potentially affected policyholders, contends that the insurer breached the terms of the contract by failing to cover these mandatory costs.
The origin of the litigation dates back to a car accident that occurred in 2018 that left Plaintiff McCoy’s vehicle completely destroyed. Geico, after determining that the vehicle was a total loss, paid him about $3,500, excluding title transfer and registration costs, which are mandatory in New Jersey.
McCoy argues that these costs are an integral part of a vehicle’s ”replacement cost” and that their exclusion constitutes a breach of contract. McCoy was not at all happy with this payment and decided to pursue the lawsuit.
Class Action Lawsuit Against Geico: Millions to Compensate Plaintiffs
If the proposed settlement is approved in the judicial instance, the members of the affected group could receive compensation equivalent to approximately 90% of the title and registration transfer expenses, which will definitely be a significant financial relief for the policyholders who faced these additional costs.
In addition, Geico has agreed to cover these expenses in future total loss cases in New Jersey, setting a precedent for the way the insurer will handle such claims in the future, which could forever change the way these types of cases are adjudicated.
McCoy has expressed to the court that the terms of the agreement are “fair, reasonable and adequate”, while reinforcing the viability and fairness of the same. This statement could positively influence the judge’s decision when considering preliminary approval of the settlement.
Geico and Other Class Action Lawsuits
This agreement is not an isolated event. A similar settlement was recently reached in Louisiana, where insurer Geico was also the subject of a class action lawsuit for reasons similar to those in the New Jersey accident.
In that class action settlement, eligible plaintiffs received a settlement payment to cover all title transfer expenses and fees as part of their total loss payment.
The settlement benefits Louisiana policyholders insured by Geico under an automobile insurance policy who filed a covered total loss claim between November 5, 2010 and November 30, 2023.
Without accepting any guilt, Geico agreed to pay up to $42 per person, and the deadline to participate or exclude from the settlement was April 18, 2024. The final hearing was on May 15, 2024, when the agreement was approved.